XenoPort Stock rise to 60% when the news came out on Monday that it will be bought by Arbor Pharmaceuticals. The company’s premium on the closing stock price is 60%; this is before the takeover news was released. Currently, XenoPort’s price per share is $7.3. It is estimated that this deal would be around $467 million.
Horizant, Xenoport’s star drug is used for the treatment of moderate to severe cases of primary restless leg syndrome and post herpetic neuralgia.
According to the National Sleep Foundation, 1 out of 10 adult Americans suffer from this condition. It also known as Willis-Ekbom Disease which is a sleep-related movement disorder characterized by unpleasant urges to move the legs while having a rest. On the other hand, Post herpetic neuralgia is a complication of Shingles due to herpes zoster virus. This condition causes burning pain that lasts even if the blisters have already disappeared.
Horizant is responsible for over $14 million revenue for the first quarter. But it is still unprofitable – leaving a Q1 net loss of more than $14.5 million.
When the news of acquisition spreads out, Ed Schutter, Arbor CEO, commented that that this drug still carries a huge potential. Arbor Pharmaceuticals is based in Georgia, and they are specializing in hospital, pediatric and cardiovascular market.
In a press release statement, Schutter believes that XenoPort’s sales team is one of the best. He is optimistic that they can continue the momentum that they have started to commercialize Horizant.
A Series of Takeovers
This is just a series of takeovers that were flooding the news lately. Few days ago, Pfizer also announced that they are buying Anacor Pharmaceuticals. Anacor stocks also rise when the news of merger came out.
Pfizer is eyeing for Cribasole which is still under FDA review. Cribasole has a lot of potential for the treatment of eczema. There is no available drug yet that has lesser side effects making it the preferred drug for the treatment of various type of eczema including dermatitis.
The premium deals between Arbor and XenoPort and also Pfizer and Anacor showed that bigger companies are serious in acquiring solid assets.
The deal is subject to approval by the regulatory boards. It is expected that this will be completed by third quarter of this year.
The Merger: A Brighter Hope for the Future
Arbor’s acquisition of XenoPorts proves to be of value for the stockholders. When the news comes out the stocks of XenoPorts boost to 60%, it goes to show that the investors are excited to these new developments. Horizant is an added value to Arbor’s portfolio.
Arbor’s are in the right position to commercialized and expand their market. The merger of these two companies is expected to have a great and profitable outcome.
This is also a big leap for Xenoport considering that they have a very solid drug, yet they lack the machinery to promote it in the market. Arbors acquisition will provide support for the needed commercialization of this drug. This merger will soon bring Horizant to a higher level, hoping to reach more target customers and generate more sales.